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Monday, 11 August 2014

A COMPARISON OF U.S. AND CHINESE LUXE TRAVELERS

Throughout my experience in hospitality and tourism marketing,
I’ve learned many things – particularly that cookie-cutter marketing across
global demographics doesn’t yield the results we marketers seek. Consider the
U.S and China – two international markets with a powerful share of
high-net-worth consumers that we luxury professionals endeavor to attract.
There are clear-cut differences between U.S. and China’s wealthy citizens so it
would be a misstep to market to them as if these diversities didn’t exist.

The latest issue of the Hurun Report’s “2014 The Chinese Luxury
Traveler” presented some key insights on the vital China market, and when the
information is compared against what we know about the U.S. affluent, some
enlightening distinctions emerge – distinctions that global marketers should
recognize and embrace when it comes to smart strategizing.

TOURISM’S POPULARITY CONTINUES

According to the Hurun Report, which was produced in cooperation
with the International Luxury Travel Market (ILTM) to analyze the travel habits
and consumption patterns of China’s high-net-worth individuals (HNWI), “Tourism
remains supreme as the number one leisure pursuit for China’s wealthy.” This
sentiment resonates with the U.S. affluent as evidenced by my many conversations
with well-established U.S. luxury travel advisors. But, while the affluent in
both countries share a passion for travel, there are differences in where these
consumers want to visit.

WHERE AROUND THE GLOBE DO THEY GO?

Australia is the preferred international tourism destination for
China’s HNWI segment, notes the Hurun analysis, jumping from seventh place last
year to the top spot for 2014. For these outbound travelers, European countries
have declined in popularity (France was their top spot for 2013).

Although Australia remains on U.S. affluents’ bucket lists, this
doesn’t translate into an impressive conversion rate of bookings, largely due
to the full-day of travel to the country. Instead, Italy and France remain exceedingly
popular for the U.S.; interest in Eastern Europe, particularly Croatia and
Montenegro, continues to grow; and there is a renewed intrigue in Japan.

In terms of cruising, the Caribbean ranks highest for the Chinese
while for the U.S. the desire is to navigate the waters of the Baltic Sea and
the Mediterranean. And, for many U.S. high-net-worth consumers, the appeal of
European river cruises continues to grow.

THE IMPACT ON SPEND

One of the most significant differences between the two countries
relates to the affluent travelers’ spend in a destination. The U.S. luxury
traveler tends to spend more money at the hotel – on the room, food and
beverage, and ancillary fees around the property – and in purchasing local,
authentically crafted items while the Chinese affluent spend more on branded
goods (think Louis Vuitton and Hermes) and shopping.

DIFFERENCES AMONG ADVISORS

The methods of booking travel in the two countries are quite
dissimilar. In the U.S., the affluent seek out luxury travel advisors to curate
unique, unrivaled travel experience. These advisors are an indispensable
resource thanks to their experience, expertise and knowledge base, which is why
high-net-worth consumers still desire their assistance for long-haul travel
with multiple sectors. In China, there is more of a concierge approach in that
often a trusted financial advisor is sought after for advice on travel.